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Biggest rise in US producer prices in 3 years on energy
Source: Agencies |
September 14, 2012, Friday
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Print Edition
Print Edition
US producer prices rose by the most in three years in August as the cost of energy surged, but underlying inflation pressures were contained, keeping the door open to additional monetary policy easing.
Other data yesterday underscored the weakness in the labor market, a major concern for the Federal Reserve, with the number of Americans filing new claims for jobless benefits rising to a two-month high, although some of the gain was attributed to Tropical Storm Isaac.
The US Labor Department said its seasonally adjusted Producer Price Index increased 1.7 percent last month, the largest gain since June 2009 and accelerating from July's 0.3 percent rise.
Economists polled by Reuters had expected prices at farms, factories and refineries to rise 1.1 percent last month.
Wholesale prices excluding volatile food and energy costs rose 0.2 percent, slowing from a 0.4 percent increase in July. The rise matched economists' expectations.
In a second report, the department said initial claims for state jobless benefits rose 15,000 to a seasonally adjusted 382,000. Economists polled by Reuters had forecast claims rising to 370,000 last week.
A department official said Tropical Storm Isaac, which drenched parts of the country, accounted for about 9,000 of the claims filed last week. The number is not adjusted to take normal seasonal patterns into consideration.
"The latest report simply confirms what the Federal Reserve already knows about the state of employment and will only encourage it to further support the economy through wider use of its balance sheet," said Andrew Wilkinson, chief economic strategist at Miller Tabak in New York.
Even accounting for the storm, the report suggested little improvement in the labor market after job growth slowed sharply in August. The four-week moving average for new claims, a better measure of labor market trends, climbed 3,250 to 375,000, the highest since the middle of July.
Employers added 96,000 jobs last month, down from July's 141,000.
While the jobless rate fell to 8.1 percent in August from 8.3 percent, it was because Americans gave up the search for work.
While the rise in overall wholesale inflation last month could lift consumer prices, the impact may be temporary given sluggish job growth and tepid domestic demand.
Consumer inflation is below the Fed's 2 percent target.
Overall producer prices last month were buoyed by a 6.4 percent increase in energy prices, the biggest rise in three years.
Other data yesterday underscored the weakness in the labor market, a major concern for the Federal Reserve, with the number of Americans filing new claims for jobless benefits rising to a two-month high, although some of the gain was attributed to Tropical Storm Isaac.
The US Labor Department said its seasonally adjusted Producer Price Index increased 1.7 percent last month, the largest gain since June 2009 and accelerating from July's 0.3 percent rise.
Economists polled by Reuters had expected prices at farms, factories and refineries to rise 1.1 percent last month.
Wholesale prices excluding volatile food and energy costs rose 0.2 percent, slowing from a 0.4 percent increase in July. The rise matched economists' expectations.
In a second report, the department said initial claims for state jobless benefits rose 15,000 to a seasonally adjusted 382,000. Economists polled by Reuters had forecast claims rising to 370,000 last week.
A department official said Tropical Storm Isaac, which drenched parts of the country, accounted for about 9,000 of the claims filed last week. The number is not adjusted to take normal seasonal patterns into consideration.
"The latest report simply confirms what the Federal Reserve already knows about the state of employment and will only encourage it to further support the economy through wider use of its balance sheet," said Andrew Wilkinson, chief economic strategist at Miller Tabak in New York.
Even accounting for the storm, the report suggested little improvement in the labor market after job growth slowed sharply in August. The four-week moving average for new claims, a better measure of labor market trends, climbed 3,250 to 375,000, the highest since the middle of July.
Employers added 96,000 jobs last month, down from July's 141,000.
While the jobless rate fell to 8.1 percent in August from 8.3 percent, it was because Americans gave up the search for work.
While the rise in overall wholesale inflation last month could lift consumer prices, the impact may be temporary given sluggish job growth and tepid domestic demand.
Consumer inflation is below the Fed's 2 percent target.
Overall producer prices last month were buoyed by a 6.4 percent increase in energy prices, the biggest rise in three years.
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